What are the differences in running a business that is 1 year old versus 5 years old?

This isn’t the first time I’ve been asked this question. I’m a huge believer in self-reflection, so in celebration of our impending 7 year anniversary I wrote down the differences of running a day 1 business versus a day 2,555 business.

Change is Unavoidable

While I thought I understood that things change and move at a rapid pace in the business world, I never truly *got it* until I started my own company.

The phrases “shit happens” and “life throws you curveballs” really began to mean something to me from day 1 of the business.

How does that differ from day 2,555?

Now that I’ve accepted that things will change — customers will come and go, trends will pop, tax law will change — I’ve taken the stance of racing change to the finish line.

As the CEO of this business, my role is to look up and out of the business. What can I do to anticipate changes such as:

How customers purchase digital marketing services

What customers are willing to pay for digital marketing services

Where will our next brilliant team member come from? How can I meet them before I need to hire them?

Now that we’re approaching day 2,555, the bullets above are things that I think about every single day. On day 1 I was excited just to convince *any customer* to hire us and wasn’t focused on the future!

Process = Scale

The actual process of creating process? It’s hard, will try your patience and will definitely piss you, your employees and your customers off at times.

But strong process allows your business to scale without breaking.

On day 1, we had all the time in the world to work on client requests (to be honest: we probably had too much time). This led us to delay any process-creating exercises. Why would we need it? We have all the time we need to service our client!

Notice the end to that last sentence: Client. We started with a single client and focused 100% of our energy on helping them grow.

Once we got clients (plural!) it became more and more difficult to avoid the need for processes like:

Where do we store files?

How do we share deliverables with clients?

What system or product do we use to track our time?

How can we accurately bill for our time?

As we approach day 2,555 our company has a lot of process in place – and we add more every day! This process enables both our clients and ourselves by setting clear expectations, understand what deliverables will look like and many more little process bits that we discovered were important along the companies journey.

Understand Product / Market Fit

Our value proposition on day 1 was pretty simple:

We are cheap

You could totally white label us!

We have lots of domain expertise

We have all the time in the world – we only have one client!

There’s a lot missing from that value proposition. A few questions that come to mind as we approach day 2,555 are:

Hey Mike, can you draw a picture of your ideal customer on this whiteboard? What is their role and department? Size of organization they represent?

How does our pricing compare to other digital marketing agencies? Who are those agencies?

What does our agency do better than any other agency in the world?

Why should anybody hire our agency versus one of our many competitors?

On day 1 we were all energy and excitement. We’ve still got that energy on day 2,555 but we want to focus that energy in the right place. And that’s where process and product/market validation (aka product/market fit) come into the picture.

Dive Deep into Financial Operations

I’ve watched a lot of advertising, PR and marketing agencies go out of business over the past 7 years.

There were extremely competent people running these companies. My competent counterparts hired some of the most talented folks on the market to join their company. Clients were flowing through their sales and marketing funnels. Work was being produced at a steady rate.

But they didn’t keep their focus on the most important responsibility of a business owner: They were running a business. Businesses run on cash.

I was wholly unprepared to handle the financial operations of our business on day 1. But like I said earlier — I had a lot of energy and excitement and wanted to grow into that role!

As year 3 and 4 passed by I was starting to figure out a few critical components of running a financially healthy business:

Iif the business was going to earn revenues on an ongoing basis I needed to understand our costs inside and out and create sales targets, pitch clients and close deals that support the economic needs of the business.

In short: I needed to learn how to really generate revenue for the business. Not just crank out invoices and blindly read QuickBooks Online reports. But to read those reports as a financially literate professional, find the leading and trailing indicators and watch which direction they company was headed financially.

What do the next 2,555 days have in store for MKG?

I’m not naive enough to think I’ve “figured it all out” (spoiler: I haven’t) but I’m starting to put the puzzle pieces into place here as we approach day 2,555.

So what do the next 2,555 days look like on my entrepreneurial journey here in New Orleans?

I’d be happy to share our growth plan for MKG and my other business ideas over a cup of coffee and tell you 🙂 Find me on Twitter at @mikekrass and we’ll set something up!